I attended a movie at the recently established Peoria Theater on Saturday. It’s located in the Landmark Plaza; two of the screens that used to be part of the old Landmark Cinemas (later Nova, currently Reynolds) now make up the new independent film theater. In addition to the usual popcorn and soda, you can also buy beer and other alcoholic beverages, making the place an adults-only (over 21) establishment.

I went to see the film “I. O. U. S. A.,” about the skyrocketing national debt and its implications. You can see an abbreviated (30-minute) version of the film at their website and on YouTube.

Admission was inexpensive ($5), as was the popcorn and soda — at least, for a movie theater ($7 total for both). The screen was small, but the theater was clean, and they showed real film, not a DVD on an LCD projector like another local theater. At 4:45 on a Saturday, it turned out to be a private screening, since I was the only one there for this particular film. The service was friendly, and it was a pleasant experience overall.

The film itself, however, was as interesting as it was depressing. It chronicled America’s budget deficit over the life of the country, as well as its more recent deficits in savings, trade, and leadership. The film mainly focuses on the work of Robert Bixby of the Concord Coalition (a “non-partisan, grassroots organization advocating generationally responsible fiscal policy”) and former U.S. Comptroller-General David Walker, who is now the President and CEO of the Peter G. Peterson Foundation (whose mission is “to increase public awareness of the nature and urgency of key economic challenges threatening America’s future and accelerate action on them”).

The problem in America, according to the filmmakers, is that we spend more than we produce. It’s a problem that plagues the nation from federal policymakers to individual citizens. We’re living beyond our means, feeling a false sense of wealth due to easy credit. And whereas your personal debts will more or less die with you, the public debt will be passed on to the next generation to pay.

Furthermore, because of our savings deficit in America, most national debt is held by foreign countries, which leads to some sobering implications. One that the movie points out is our vulnerability to “financial war.” This is where a creditor country can pressure a debtor country into modifying its policies by threatening to tighten credit. They use the example of the Suez Crisis when the U.S. forced our allies into a cease fire with Egypt by threatening to sell part of the U.S. investment in British government bonds, which would have significantly devalued the pound. As Proverbs 22:7 says, “the borrower is slave to the lender.”

I thought the film was well-done (production-wise), although I certainly haven’t seen as many documentaries as the Washington Post movie critics, who panned the film for being formulaic. I thought the slick graphics made a difficult topic easy to understand. Also, the movie moved at a good pace.

Substantively, the conclusions drawn by the filmmakers are, naturally, not universally held. The Center for Economic and Policy Research has published a paper titled, “IOUSA Not OK: An Analysis of the Deficit Disaster Story in the Film IOUSA,” in which the authors (Dean Baker and David Rosnick) give a real-time, point-by-point counterargument. While they take issue with several points made in the movie, the main thrust of the report is their contention that health care costs are the major culprit causing dire debt projections, and that if the country can rein in these costs, national budget deficits and their resulting debt will be no big deal:

The federal government pays for almost 50 percent of the country’s health care costs through Medicare, Medicaid, and other health care programs. Almost all of the payments in these programs go to private sector health care providers (hospitals, doctors, nursing homes etc.). The government projects that private sector health care costs will rise far more rapidly than the economy grows. This assumption leads to projections of massive deficits in the next few decades.

While these projections of exploding health care costs imply that budget deficits will be a huge problem, if the United States can contain its health care costs, then budget deficits will be very manageable….

In other words, the real problem facing the country is a broken health care system. If health care costs continue to grow at the projected rate, then future generations will see relatively little gain in their living standards, even if we eliminate all government spending on health care.

Nevertheless, if something isn’t done about the health care crisis, then projections are that the debt will rise not only in real dollars, but as a percentage of gross domestic product. Even critics of the film agree that this scenario would be bad for the country. Whatever the solution is, something needs to be done soon to address this issue.